Cash flow will make or break a business. And while your clients might be great at what they do, many of them struggle with managing their cash effectively. That’s where you come in. As their accountant or bookkeeper, you have the power to leverage your cashflow know-how to guide them toward better financial decisions, improved profitability, and long-term success.
Here are 9 ways you can help your clients take control of their cash flow and build a healthier business.
1. Build a Cash Flow Forecast
Are your clients constantly asking, “Can I afford this?” Or do you sigh in exasperation when you see that their credit card balances have increased AGAIN this month? Then they need a cash flow forecast!
You don’t have to overthink this: A simple 90-day projection will help your clients anticipate shortfalls and plan ahead.
Easy First Step: Set up a basic weekly cash flow tracker in Excel or their accounting software. Review it with them once a month. You can create your own…or you can snag this one to help you get started.
2. Encourage Cash Reserves
No one loves to log in and see that they have little or no cash on hand. Yet many small businesses live paycheck to paycheck. A cash reserve prevents panic – both your client’s and yours – when unexpected expenses arise.
Easy First Step: Encourage clients to start with 1% of revenue and build up to one month’s worth of expenses. Automate transfers to a “Rainy Day” account. May we recommend using Relay to make this even easier?
3. Optimize Accounts Receivable
Your clients shouldn’t act as the First National Bank of [Insert Their Business’s Name Here]. Yet many businesses carry sizable accounts receivable. Slow payments are a cash flow killer. The faster your clients get paid, the better their financial position.
Easy First Step: Recommend automated invoice reminders and require deposits for large projects. Profit First Professionals partner FlexPoint offers great solutions for just this purpose!
4. Streamline Expense Management
It might seem like it’s more trouble than it’s worth to cancel that $5/month subscription that hasn’t been used in months, but every unnecessary expense drains cash. Helping clients cut waste means more money stays in their business.
Easy First Step: Have your clients review the last 90 days of expenses and cancel anything they don’t use. Yes, even those subscriptions they “might use eventually.” There’s no fancy tool required for this…just have them download their bank and credit card statements, grab a red pen, and go wild!
5. Introduce Structures that Support Positive Cash Flow
Feast-or-famine income and expense cycles are stressful. Help clients smooth out cash flow by restructuring how they bill customers and how they manage their cash throughout the year.
Easy First Step: Encourage subscription-based pricing, milestone payments, or upfront deposits. And for businesses with a high degree of seasonality, help your clients determine their “monthly nut” and set aside any excess income during peak months into a separate “seasonal stability” account. This training session explains exactly how to do this.
6. Help Clients Price for Profitability
Everyone underprices, and it’s a huge problem. Many business owners set prices based on competitor rates instead of what they actually need to be profitable.
Easy First Step: Help your clients calculate their true costs – including a healthy compensation for themselves! – and build in a 10-20% profit margin to every product or service.
7. Leverage Technology for Cash Flow Visibility
Dashboards help you more than they help your clients. Instead of fancy dashboards, give your clients real-time clarity on where their money is going.
Easy First Step: Set up a basic cash flow report in your clients’ accounting software. Then, schedule a monthly check-in to review it.
8. Implement the Profit First System
Most business owners operate in “bank balance accounting,” spending whatever is in their account without a real plan. The Profit First methodology flips that approach, ensuring profitability from day one by allocating cash into separate accounts.
Easy First Step: Help your clients set up just two additional bank accounts—one for profit and one for taxes. Even this small move can create immediate financial discipline. And if your client uses Relay, they can set these accounts up with just a few clicks.
9. Become a Profit First Professional
C’mon, you knew we were gonna go there. We’ve given away a lot of good stuff in this article, but by becoming a Profit First Professional, you get even more tools, training, and community support to help your clients permanently transform their cash flow. Plus, it’s a great way to grow your own firm.
Easy First Step: Apply now to become a Profit First Professional!
Your clients are starving for cash flow guidance. By helping them manage their cash better, you set yourself apart from your competitors as an advisor who can make a quick and lasting difference in their businesses.
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